Sraffa and the environment

In one draft note, Sraffa states that: "The difference between the ‘Physical real costs' and the Ricardo–Marxian theory of ‘labour costs' is that the first does, and the latter does not, include in them the natural resources that are used up in the course of production (such as coal, iron, exhaustion of land) [Air, water, etc. are not used up: as there is an unlimited supply, no subtraction can be made from [infinity ]. This is fundamental because it does away with ‘human energy' and such metaphysical things. ... But how are we going to replace these natural things? There are three cases: a) they can be reproduced by labour (land properties, with manures etc.); b) they can be substituted by labour (coal by hydroelectric plant: or by spending in research and discovery of new sources and new methods of economising); c) they cannot be either reproduced nor substituted - and in this case they cannot find a place in a theory of continuous production and consumption: they are dynamical facts, i.e. a stock that is being gradually exhausted and cannot be renewed, and must ultimately lead to destruction of the society. But this case does not satisfy our conditions of a society that just manages to keep continuously alive" (Sraffa's Unpublished Papers and Correspondence, Trinity College Library, Cambridge, UK, as catalogued by Jonathan Smith, D3:12:42: 33, dated 25 March 1946; Sraffa's emphasis, quoted in Kurz et al., 2000). Thus Sraffa states that his theory, the "Physical real costs" theory, is taking into account the natural resources. I argue that this is not true: my position is that Sraffa is not dealing with natural resources, but with commodities produced by industries and exchanged in the market. Thus all resources which are not produced by industries or which are not exchanged in the market (for instance, wastes) are not encompassed by its model, and can not receive a price. And we have a confirmation of this when, in chapter Ⅺ of his book, Sraffa explicitly introduces natural resources: "natural resources which are used in production, such as land and mineral deposits, and which being in short supply enable their owners to obtain a rent, can be said to occupy among means of production a position equivalent to that of 'non-basics' among products. Being employed in production, but not themselves produced, they are the converse of commodities which, although produced, are not used in production" (Sraffa, 1960, § 85). In this chapter, we will see how Sraffa deals with natural resources in his book, through the problematic of the rent, in section [1] (after a short introduction about the introduction of the rent in Quesnay and Ricardo's theories). Then we will see how the neo-Ricardians manage to introduce these resources in their models and how they deals with general environmental problems. First we will see the case of exhaustible resources in section [2] and then we will study the introduction of waste, the management of pollution control and the exploitation of renewable resources in section [3].